LuSE Bond Listing Rules Quiz
12 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the beta of security i given Cov(Ri,Rm) = 0.01104, ρi,m = 0.3, and σm = 0.16?

  • 0.045
  • 0.135
  • 0.225
  • 0.195 (correct)

    • Based on the historical data for RTF and KIU, what is the estimate of the covariance between RTF and KIU?

  • 0.110
  • 0.040
  • 0.085
  • 0.065 (correct)

    • If the correlation coefficient between RTF and KIU is 0.4500, what does this indicate about their relationship?

  • They have a strong positive relationship (correct)
  • They have a perfect positive relationship
  • They have no relationship
  • They have a strong negative relationship

    • Given the data for JKU stock and a market-index, what does a high covariance suggest about the relationship between JKU stock and the market-index?

    <p>A strong positive relationship</p> Signup and view all the answers

    How does beta differ from correlation coefficient when analyzing securities?

    <p>Beta measures volatility relative to the market whereas correlation coefficient measures the strength of the relationship.</p> Signup and view all the answers

    In finance, what does a low beta value for a security typically indicate?

    <p>Lower risk compared to the market</p> Signup and view all the answers

    Based on the capital asset pricing model (CAPM), how is JKU valued?

    <p>Undervalued if the expected return is greater than the required return</p> Signup and view all the answers

    Using the asset-based valuation approach, what is the estimated value per share of ZANACO?

    <p>K17.14</p> Signup and view all the answers

    Which discount rate is likely to result in a negative Net Present Value (NPV) for the given project?

    <p>15%</p> Signup and view all the answers

    If the broker submits a limit buy order for 700 shares at K20.50, what is the most likely average price they would pay?

    <p>K20.50</p> Signup and view all the answers

    Assuming the beginning value of the float-adjusted market-capitalization-weighted equity index is 100, what is the likely ending value?

    <p>105.71</p> Signup and view all the answers

    Calculate the firm's degree of total leverage (DTL).

    <p>1.7</p> Signup and view all the answers

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser